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Establishing Billing Rates for Business Valuators

There are a number of questions that I have encountered and explained to both clients and attorney’s related to how billing rates are determined for business valuation professionals. I will have a broad discussion of this today and in future topics will address other issues that are in the minds of both the client and…  Continue Reading »

Is a Business Valuation an Art or Science?

There are a number of questions that I have encountered and explained to both clients and attorneys related to whether a business valuation is an art or science.  I will have a broad discussion of this today and in future topics will address other issues that are in the minds of both the client and…  Continue Reading »

Why Do You Restrict Who Can Use My Business Valuation Report?

There are a number of questions that I have encountered and explained to both clients and attorneys related to why a business valuation report is restricted to a certain use.  I will have a broad discussion of this today and in future topics will address other issues that are in the minds of both the…  Continue Reading »

Why Does It Take So Long to Do a Business Valuation?

There are a number of questions that I have encountered and explained to both clients and attorneys related to the length of time required to do a business valuation.  Some of the answers are simple and straight forward while others are more complex.  I will have a broad discussion of some of these today and…  Continue Reading »

How to Manipulate a Business Value by Calculating Accumulated Depreciation

Manipulating a value of a company is relatively easy.  Unfortunately it is difficult to determine if the manipulation is intentional or an error in judgment.  An intentional error is performed to provide the client with a desired result while an error in judgment is not intentional or the valuation analyst is not experienced enough to…  Continue Reading »

Business Valuation: Depreciation Expense in Excess of Capital Expenditures

Hello, my name is Richard Claywell and this is Litigation Speaks. This week, I am discussing making a projection/forecast and having the depreciation expense exceed the capital expenditures.  However, before I get started I want to reiterate again that the example I am showing is from an actual case and this is what business valuation…  Continue Reading »

Business Valuation: Coefficient of Determination (r2), Damages and Lost Profits

This week, I am discussing the using of regression analysis to make projections or forecasts of revenues and determining fixed and variable or saved costs in a damages model.  However, before I get started I want to reiterate again that the example I am showing is from actual cases and this is what business valuation…  Continue Reading »

Business Valuation: Adding verses Subtracting Long-Term Sustainable Growth

This week, I am discussing (a business valuation report where the expert erroneously added the long-term sustainable growth instead of subtracting it and its impact on the value of a company.  The theory is incorrect and will always undervalue a company. However, before I get started I want to reiterate that the example I am…  Continue Reading »

Business Valuation: Conclusion of Value, Incorrect Weighting of Methods

This week, I am discussing (a business valuation report that has used a weighted average of the market, income and asset approaches).  In my opinion the analysis was inaccurate and indicates bias by determining an artificially low value.   Initial Business Valuation Conclusion The expert has performed the Asset, Market and Income Approach to determine…  Continue Reading »

Business Valuation: Incorrect Cost of Goods Sold and Gross Profit

Cost of Goods Sold Based on Historical Trends It is common to see a Discounted Cash Flow in a business valuation report.  There are a lot of companies that sell or manufacture a product.  These types of companies are supposed to account for the inventory needed to sell their product.  Exhibit 1 below is an…  Continue Reading »

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